The question of how much a big sporting event affects a city’s economy is one I’ve pondered numerous times over the years. With the Super Bowl coming to
Dallas Arlington, following on the heels of the NBA All-Star game, it’s time to look at what the effect was, and what it will be, up there.
The projected $268.5 million economic impact of February’s NBA All-Star Game at Cowboys Stadium was overestimated for some cities and in some spending categories, a review of tax data and industry research suggests.
Michael Casinelli, the consultant who prepared the All-Star economic forecast, said he stands by his work.
But he acknowledged that city-by-city breakdowns of spending are less likely to be accurate than estimates for the entire region.
The consultant’s firm, Marketing Information Masters, also prepared the report projecting that next year’s Super Bowl at Cowboys Stadium would generate $612 million in spending, a record for the game. Economics professors have said that number is too high, but the head of the local Super Bowl host committee said he was not concerned because the Texas comptroller’s office has verified most of the study.
But a hotel industry report provided to the Dallas Convention & Visitors Bureau raised questions about at least one of the economic impact study’s major estimates.
A report from STR Global said that on game day and the three days before it, $10.5 million was spent in the Dallas hotels that account for almost all the city’s lodging revenue. That’s less than half the $22 million the consultant’s study expected for Dallas.
The study’s projections also estimated All-Star-related rental car revenue at $13.5 million. But actual February spending on all car rentals at D/FW International Airport and Love Field was $21.8 million. That means the All-Star Game would have accounted for 62 percent of car rentals at the airports in February.
I’ll stipulate that projecting economic activity, especially in cases like this where there’s a big, one-time event that’s never happened before, is hard work. My problem with these projections, and the often breathless news stories that generally accompany them, is that they’re taken as gospel truth even though they’re basically guesswork. Even worse, they’re usually done via proprietary processes, so it’s impossible to substantively critique them. And as often as not, there’s little followup done afterward to see if the reality matched the forecast in any meaningful way. At least some of that happened here, which is all to the good. I wish something like that had been done for Houston after Super Bowl XXXVIII.